RBI Slashes Repo Rate: Fixed Deposit Returns Set to Drop

• RBI cut the repo rate by 25 basis points to 5.25% on December 5, the fourth reduction since February.
• The rate cut is expected to lead banks to lower fixed deposit (FD) rates, impacting risk-averse investors and senior citizens.
• Banks have already reduced FD rates, with some mid-sized and small finance banks making sharper adjustments.
• Depositors are advised to consider strategies like FD laddering or locking into longer tenures to manage interest rate risks.
• Alternatives to FDs, such as corporate FDs, debt mutual funds, and government securities, are suggested for potentially higher returns.

Why It Matters: RBI rate cut means lower returns on your fixed deposits.